Investment Companies: Disclosures about Investments in Another Investment Company
Last updated on August 13, 2015. Projet removed from technical agenda.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
*Due Process Documents
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
Board/Other Public Meeting Dates
Project ObjectiveThe objective of this project is to require disclosures in an investment company’s financial statements that will provide transparency into the risks, returns, and expenses of an investee that is also an investment company.
Download the Exposure Draft of the proposed Accounting Standards Update.
*Board/Other Public Meeting DatesThe Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
|*August 5, 2015||Board Meeting—Decision to remove project from agenda|
|July 30, 2014||Board Meeting—Decision to issue a proposed Update.|
|April 4, 2014||Board Meeting—Decisions about the path forward in light of concerns raised by external reviewers.|
|October 23, 2013||Board Meeting —Decisions about scope, disclosure requirements, applicability to interim periods, and transition|
|March 13, 2013||Board Meeting—Decisions about the next steps.
Summary of Outreach
|January 23, 2013||FASB Board Meeting—Decisions about the threshold and “as of” date for disclosures|
|August 29, 2012||Board Meeting—Decisions about disclosures requirements|
Background InformationDuring its deliberations on the joint investment companies project, the Board became concerned about transparency into the risks of an investee fund to which the investors in the reporting investment company have economic exposure. As part of that joint project, in October 2011, the FASB issued proposed Accounting Standards Update, Financial Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The Exposure Draft would have required an investment company to consolidate controlling financial interests in another investment company in a fund-of-funds structure.
Stakeholders strongly disagreed with the consolidation requirement in that Exposure Draft. Many of those constituents stated that the Board’s concerns regarding transparency could be addressed through disclosures about investee funds in the notes to the financial statements. Stakeholders also stated that disclosures about investments that are significant to the reporting investment company’s net assets and not just those investee funds that are controlled would provide more decision useful information for investors. In light of the feedback received, the Board decided to develop disclosures about investments in another investment company.
In April 2014, because of cost/benefit considerations the Board decided not to proceed with disclosures developed that would provide information about investments in another investment company. The Board, however, decided to proceed with its remaining decisions that would result in targeted improvements to investment company reporting.
Contact InformationAdriana Yepes
Postgraduate Technical Assistant